Congress May Change The Financial Rules for Veterans Benefits
It’s Back: The Veteran’s Administration Proposes New Rules for Aid & Attendance
Aid & Attendance benefits is a monthly financial benefit provided to service men and women (and their spouses) to help pay for out-of-pocket medical expenses that are not reimbursed by insurance. The goal of this program is to help the veteran be able to stay at home or, in the community rather than reside in an institution. For many veterans, this financial assistance helps pay for home health care and assistance with activities of daily living which can improve quality of life and care. In order to quality for Aid & Attendance the veteran must demonstrate limited financial resources, limited income and out-of-pocket medical expenses.
The Veterans Administration has proposed a rule in Congress that will make the net worth (assets) and income requirements to qualify for Aid & Attendance similar to the Medicaid rules. Supposedly the reason for the proposed rule is to maintain the financial integrity of the program. Currently, Medicaid law is more restrictive than VA law. Here are a few examples:
- Transfers: Transfers of assets (even to family) within 5 years of applying will cause a Medicaid applicant to be denied benefits for a period of time based on the value of the assets transfers. This is called the “look-back period” and “transfer penalty.” The VA rules do not penalize transfers. The proposed VA rule seeks to have transfers penalized (delay in qualifying) if made within 36 months of applying. Transfers would include: birthday gifts to family members; charitable gifts; gifts to religious organizations. This could unjustly result in a veteran being penalized when the gift had nothing to do with qualifying for Aid & Attendance. The proposed rule includes an exception if the veteran transfers assets to a child who is incapable of self-support due to a disability that began prior to age 18. This rule does not take into consideration that adult children of the veteran could become disabled after age 18. The penalty would be calculated by dividing the value of the asset transferred by the maximum annual pension rate for Aid & Attendance (rounded down to the nearest whole number). The maximum penalty period would be 10 years. Again, the proposed rule results in unequal treatment of a veteran due to marital status or, the surviving spouse even if they have transferred the same sum of money; this unequal result is due to the fact that they each receive different annual pension rates.
- Trusts: Placing assets in an irrevocable trust will cause delay in qualifying for Medicaid. The VA proposed rule seeks to counts assets placed in a trust which can cause disqualification for Aid & Attendance.
The proposed rule also identifies the type of medical expenses that can be deducted from income. These medical expense items or services must be medically necessary or, improve the individual’s ability to function. The proposed rule will limit the hourly rate for a home health aide that can be deducted from the veteran’s income; the hourly rate would be taken from the annual Met Life report on healthcare rates.
The current rules do not clearly define how much net worth a married veteran or, an unmarried veteran (or their widow(er)) may have in order to qualify. It is expected that the veteran use a portion of their net worth to pay for their care. The VA does consider the age and life expectancy of the veteran when determining whether the veteran exceeds the net worth requirement. The net worth limit proposed in the rule is the number used for the community spouse under the Medicaid rules.
If you are a veteran, a veteran’s spouse or family member please contact your representative in Congress to let him/her know how this proposed rule could affect you and your ability to age in place.